A Term Life Insurance Policy Is A Bridge For Both Insured And Uninsured Individuals
Not surprisingly from its name, a term life insurance policy offers cover for a specific period of time at the end of which you can either discontinue the plan or buy a new policy to provide further cover.
When you die the sum insured under the plan is paid out to your partner or nominated beneficiary but, if you outlive the plan, then you receive nothing. Thus it is a very effective method of providing funds to cover a known future expenses in the event of your death and is frequently the best way to get a good level of death benefit. Unlike many other forms of life insurance, term life insurance is not a ‘cash builder’ policy and so it is often called the purest form of insurance.
Before you take out a term insurance policy you should think about your requirements for this form of cover. For example, you might have mortgage payments to be made or a child’s education fees to pay at a later date and a term life insurance policy will ensure that the money is going to be available to pay these expenses should anything happen to you. You also have to think about whether or not it is more advantageous to have a policy written solely on your life or written as a joint policy for you and your spouse or partner. You must also remember that your policy is only valid as long as you continue to meet your premium payments and that failing to maintain such premium payments will result in the immediate termination of the policy.
A term life insurance policy offers a bridge for people who do not have life insurance and who think that they simply cannot afford to pay for comprehensive life insurance cover like that provided by a whole life or universal plan. Although a term policy will never acquire any cash value and is thus of very little use as a savings vehicle, it provides you with protection in the case of your death to ensure your financial plans are going to be met and the future secured for your family.
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